CVC Capital Partners Ltd. has just requested the services of Goldman Sachs Group Inc. to help explore the possibility of selling their stake in Formula One in an initial public offering (IPO).
CVC is currently looking to offload their 63.4% holding of the most internationally recognized motorsport racing series, which may be valued as much as US$10 billion, with Singapore and Hong Kong rumoured to be a keen player in providing the listing venue in order to facilitate the sale and help boost their respective economy.
However, even if the sales goes through, it is said that Formula One Chief Executive Officer Bernie Ecclestone, 81, will still remain in his position under CVC’s plans and has no intention to sell his 5.3% stake, having managed the sport’s commercial unit since 1995. Currently, Eccelstone is negotiating with teams over the terms that will expire at the end of 2012 and apparently having teams such as Ferrari SpA and Red Bull GmbH to pay as much as US$45 million to sign up till 2020.
The attraction to Singapore isn’t due to the fact that it has held a Formula 1 race since 2008, instead the island-state’s efforts to be well recognized as a popular destination for wealthy individuals; having created a sort of eco-system around private-banking, wealth management and other sorts of financial services, seems to be coming to fruition. Now that Singapore’s Formula 1 contract will be expiring this year, it seems that they have begun to hire analysts to asses the economic impact it has had when it was their turn to receive the Formula 1 circus.
With the credit crisis in Europe playing havoc on the Euro currency making it extremely volatile as of late, it seems to make better sense to seek a more stable ground, and what better place than to seek it in a location where there is an abundance of growing economies; namely Asia.
Singapore has so far helped to facilitate the listing of Manchester United back in September 2011, having raised roughly US$1 billion in an IPO. However, Hong Kong has hosted Prada SpA and Samsonite International SA in 2011.
